Notes of the Month

[Phase 3: Fire Down Below]

(October 1973)

THE CRISIS which the government has been fearing all year now seems to be erupting. The combination of accelerating price rises and an unprecedented balance of payments problem has forced it to reverse policy and jam the brakes on the economy. And its attempt to hold wages below price rises in Phase Three has already encountered greater and more powerful resistance than did either Phases One or Two.

The government knows that there is no guarantee that it can either solve the economic malaise or make Phase Three stick. But it also knows that if it cannot deal with these problems, then it can no longer offer any solution to the difficulties which beset British capitalism. In a very real sense, the future of the Tory government depends on its handling of the present crisis.

Its first major defeat on the wages front came completely unexpectedly both for it and for the national trade union leaders. The unofficial all-out action of a few hundred Glasgow firemen has achieved more in a matter of days than the combined efforts of all the official national leaderships put together.

When Phase Three was announced, the intention was to keep the maximum possible wage increase down to about 10-11 per cent, and that figure included three and a half per cent to be allowed only after productivity concessions had been in effect for three months.

The firemen have shown that it is possible to force the government to concede half as much again as the norm under the freeze. The lesson is not going to be lost on millions of other workers. The power station engineers are already taking industrial action. Ambulance men in areas like Durham have begun emulating the Glasgow firemen. Public transport workers in London are planning strikes. And, above all, of course, there is the miners’ overtime ban.

This movement has created very real fears within the ruling class that the whole wages policy could be in ruins. The Economist has pointed out that ‘The moral is clear. Strikes and the threat of strikes win inflationary successes in Stage Three ...’ With some groups of workers having gained wage increases of over 14 per cent, ‘no union leader will want to settle for seven per cent.’

And the freeze is certainly being breached at the local level as well: a survey of 177 companies (by Industrial Relations Law Reports) has shown 14 per cent of firms as already having violated Phase Three.

The firemen forced a hole in the wages dam through which other groups are beginning to trickle. If the miners have the same success, that will be the effective end of the government’s pretence at holding back wages.

That is why the Tories have declared a state of emergency so early in the dispute. If the overtime ban escalates into a strike, it is likely to be the most important in the life of the present government and the most bitter Britain has seen for many years.

The Strategy Against the Miners

THE GOVERNMENT would like desperately to be able to isolate the miners’ pay claim from those of other workers. It remembers that it was the miners who destroyed its last pay norm at the beginning of last year. And it knows that the oil shortage has increased their industrial power considerably. Recognising the strength of the miners, it carefully tailored Phase Three with the intention of allowing them (or a section of them) wage increases greater than other workers were intended to get. According to the Economist, the ‘unsocial hours’ clause in the Phase Three regulations was ‘drafted partly by an official of the coal board’, so that the miners would benefit and no-one else.

But the sort of rise being offered has not so far been enough to buy off the miners’ militancy – which is hardly surprising, given that by the time it comes into effect in March all but a small minority of miners (the Financial Times figures speak of the much quoted rise of £6 before tax being for one third of miners only, with 40 per cent getting less than a £3.50 rise) would be considerably worse off than they were two years before, after the last strike. But the government dare not offer the NUM sufficient to placate its members lest the appetites of other groups of workers get whetted. And so it is being forced to fight a battle it knows it has a fair chance of losing.

The Tories have been using against the miners a multi-pronged strategy.

Firstly, the government is endeavouring to isolate the miners in the same way that it isolated the power workers during their work to rule three years ago. The press is attempting to portray the miners as ‘holding the country to ransom’ so as to make it more difficult for them to get the sort of solidarity that enabled them to win last time. Editorials in both The Times and the Financial Times have spoken of ‘public opinion’ as one of the government’s key weapons.

The state of emergency clearly fits into this scheme of things. It has served to focus attention on the miners at a very early stage in the struggle, giving the impression that any fault in fuel supplies – even if really due to the inadequacy of electrical generating capacity – is their responsibility.

It has other functions as well, though. The most obvious is to enable industry to begin to conserve energy now, because, as The Times puts it, the Tories ‘are determined not to repeat the error of the last miners’ strike and continue to use up valuable reserves until they have no choice but to give in or close the country down.’

Finally, the state of emergency is meant to intimidate the miners themselves. In this respect, it backs up a number of other measures which have been introduced, fairly quietly, since flying pickets showed themselves to be so effective during last year’s big strikes.

The most recently publicised of these has been the creation of special police units trained to break picket lines. As the Financial Times describes it,

‘Some changes have been introduced in the police force since the last miners’ strike. Mr Carr has alerted chief constables to the need to counter violent or “flying” pickets with mobile police teams. An intelligence centre has also been set up at Scotland Yard to coordinate police action in times of violent industrial trouble. The centre will act as a clearing house for information on trouble spots around the country and will be able to despatch relief police teams where necessary.’

Parallel to this reorganisation of the police, there has been a ‘reinterpretation’ of the law by the judges. At Shrewsbury, conspiracy laws are being used against pickets for the first time in living memory. And in April Lord Widgery decided that strikers were breaking the law if they physically obstructed people or vehicles trying to pass through picket lines.

Clearly, what the Tories are hoping to arrive at is a situation where a picket can be broken long before it attains the sort of strength which enabled 10,000 engineers to close Saltley coke depot during the last pit strike.

Behind the Tories’ Threats

THE THREATS made by the Tories should not be taken too lightly. They feel that this is a battle they cannot afford to lose, given the parlous state of British capitalism and, if it comes to the crunch, they may well be more vicious in a strike situation than has been customary in the recent past.

However, they are still doing their utmost to avoid a head on clash with the whole trade union movement – because they fear a repetition of the defeats they suffered last year. They want, if possible, to hold back wages without a big confrontation. And they know that in this the trade union leaderships are their chief aids.

In the firemen’s dispute, the unions’ national leaders, despite their pronenes to making left wing speeches, condemned the Glasgow men out of hand, disciplining the local leadership. And both the TUC and the ‘left wing’ Scottish TUC instructed their members to give no backing to the firemen.

The Economist at least has been able to show appreciation of the job being done by the General Council. It writes that

‘The TUC’s general secretary, Mr Len Murray, has been playing things cool over the last month and his general council has followed his lead.’

The role played by the ‘left’ leaders of the TUC, such as Jones and Scanlon, seems hardly different in this respect than the role played by the right.

However, the government knows that if pressure continues to build up among the rank and file for a serious fight over wages, the union leaders might feel compelled to give some sort of expression to it. Few of the leaders, ‘left’ or right, want to find themselves in the position of the Fire Brigades Union, with half the rank and file in open revolt against the national officials.

The sorts of gyrations which are likely, as the union leaderships attempt to placate the rank and file while avoiding a confrontation with the government, are exemplified by the devious behaviour of Joe Gormley and the right in the miners’ union. Knowing that he could not sell complete acquiescence in the government’s plans to the membership, Gormley has tried to outmanoeuvre militants by the strangest tactics. It was the right at the NUM executive who proposed spreading the overtime ban to the safety men and maintenance workers, in the hope that the result would be isolated closures and stoppages of pits or faces, leading to fragmentation and demoralisation of the workforce. Yet it seems that Gormley may have been too clever by half – the stepping up of the overtime ban seems to have increased the militancy of many miners, convincing them that an all-out strike is inevitable.

The main aim of the government talks about draconian action against picketing is to provide moral backing to those union leaderships trying to avoid a confrontation. If he were concerned merely with using the police in a repressive manner, then Carr would not be revealing publicly the sorts of measures that have been taken to make them more effective. He is doing so because he hopes to intimidate trade unionists and avoid a real test of strength. He is providing the union bureaucracies with excuses for avoiding strike action and, if strikes occur, with excuses for avoiding effective picketing.

The economic crisis

BUT THE government’s problems do not end with the miners, or with Phase Three as a whole. Winning on that front would at best, only marginally alleviate the crisis the Tories’ economic policy faces.

Until recently, the majority feeling among the Tory leadership and within the ruling class was that the main thing was to solve the long term problem of British capitalism, the low level of investment, and that in order to achieve this goal they should go ahead and encourage expansion in the economy, regardless of the consequences. To put the brakes on the economy, it was argued, would be to repeat the mistake of the past, of ending expansion at precisely the point when businessmen were beginning to have sufficient confidence to start investing on a large scale. In any case, it was said, the ‘stop’ policies of the past were the result of an obsession with maintaining fixed value for the pound: with a ‘floating’ pound, balance of payments considerations could be ignored for months or even years, while the economy was put on an even keel.

There was, however, another body of thought within the ruling class. The representatives of this argued that the economy was overheating, that inflation was getting out of hand, and that only bringing expansion to a halt by increasing taxes and cutting government expenditure would solve the problem. Throughout the summer, the debate between these two tendencies has been continuing, with each producing its own statistics to justify its own position.

Now, however, the ‘expansionists’ wing has suffered a sharp rebuff. A series of figures released this month have shown that inflation has been getting worse than ever. Import prices jumped another five and a half per cent in September – the biggest jump in any month since the Korean war. And in the same month the annual rate at which wholesale prices were increasing rose from 12 per cent to 18 per cent. The cost of living is clearly due for yet another spurt when such goods work their way through to the shops. And on top of all this, the government is faced with the biggest gap between imports and exports ever. Ignoring the gap would mean a further fall in the value of the pound and an ever increasing escalation of prices. The government would risk ending up in a vicious circle, where the balance of payments gap caused a fall in the value of the pound, the fall in the value of the pound in turn caused the cost of imports to increase, and finally the increase in the cost of imports caused a still larger balance of payments deficit.

Rather than run the risk of this, the Tories have chosen to follow a policy, the likely outcome of which is that sections of industry will be forced to work at below their full capacity, unemployment will increase and with little incentive to investment, British big business will fall even further behind its rivals.

The International Context

THE GOVERNMENT’S problems are likely to be aggravated by what is happening to the international economy. The last 18 months or so have seen the biggest boom internationally since the early 1950s. There is fear that this will be replaced by a spell of stagnation internationally. The rate of growth of the US economy has already fallen from about nine per cent to about four per cent and a further fall may well be on the way. The oil situation threatens the Japanese economy with its first spell of real stagnation for 20 years. And there is likewise talk of 1974 being a year of stagnation in Germany.

In each case governments have been trying to slow down the rate of economic growth for the same reason that the British Tories have jammed on the brakes: to prevent prices shooting through the ceiling. But it is unlikely that any of them will be able to do more than marginally affect the rate of inflation. So large and so interlocked are individual firms, that they are able to maintain high prices without fearing competition over much, even when there is excess productive capacity in their industry: indeed, they often increase their prices to maintain their profits in the relatively smaller sales.

It is not only big business whose behaviour is less affected than it used to be the case by a slowdown in the economy. Workers too have shown that they are able to resist damaging the effects of unemployment on their organisation: during the period when a million or so were unemployed in this country two years ago, shop-floor organisation retained much of its strength and wages were hardly held back at all. The last miners’ strike came just as unemployment was touching the million mark.

So the likelihood internationally is continuing inflation, accompanied by higher unemployment and a much slower growth of markets than in the past year. It is a prospect that does not provide much hope for the government’s dream of British capitalism entering a period of ‘export led’ growth. Quite the opposite: the low investment of the past will mean British capitalism will feel the pinch more than its rivals in a period of tighter markets and heightened international competition.

Prospects

THE OVERALL economic situation means that the Tories now find themselves with their backs to the wall. Even the long canvassed suggestion of staging an election on a union-bashing programme must effectively be closed to them. The reversion to stop-go economics means disunity within their own ranks and the prospect of still higher mortgage rate is not going to win back many middle class votes. And entering a ‘union bashing’ election with the prospect of losing it, is not a risk Heath is likely to take. For a defeat would make the task of any subsequent government committed to wage restraint virtually impossible.

The recent by-election results – particularly the Govan result – show that Labour does not represent a meaningful alternative to large numbers of workers. Disillusionment caused during the last Labour government has not been forgotten. The day-to-day experience of Labour councils, in pushing up rents, in failing to rehouse slum dwellers, in backing the Tory line in relation to groups like the firemen, is reinforcing the lessons learn in 1964-70.

Labour’s inability to collect votes has one important side-effect: it is blocking an escape route from confrontation which the trade union bureaucracies would dearly like to use. They would welcome the possibility of being able to hold back the militancy of their members with the promise of a Labour government next autumn. But they cannot even guarantee that.

In the months ahead, socialist militants are likely to be presented with almost unprecedented opportunities for intervening with effect in the class struggle. Even if the right wing in the miners’ union succeeds in ending that dispute before the point of open confrontation is reached, the government is going to have to pay a heavy price for peace in the industry: the press talk of ‘£6 a week increases’ for the miners is bound to increase the pressure from other groups of workers who, until recently, accepted that there was a limit of about £3 to what could be obtained.

However, successes in the struggle ahead are going to depend on militants learning a number of lessons from the last 12 months. The most obvious – although it is still a lesson which many militants influenced by the Labour left or the Communist Party refuse to learn – is that no reliance at all can be placed in the ‘left wing’ national union leaders. They will only support industrial action under considerable pressure from below and will try to end such struggles as soon as possible, often on the most dubious basis.

But the inability of the trade union movement at present to measure up to the tasks ahead does not only involve the national officials. The crisis of leadership reaches right down the scale, to district committees, union branches and shop stewards’ committees. In far too many cases, lay officials and stewards have become cut off from the members they are supposed to represent, engaging at best in the politics of pushing resolutions through paper bodies without ensuring that the base exists at the shop floor level capable of fighting for them. Such an approach is going to be disastrous when it comes to the sorts of battles which are now on the horizon. What is going to matter is the ability of militant stewards to take the initiative in response to the attacks by employers or the government, knowing that other workers will back them up.

There is only one way to ensure that this occurs. That is by the building of the revolutionary organisation within the factories, involving newly militant workers as well as established stewards. That alone can ensure that the hold of the right wing and the ‘resolutionary left’ is continually being challenged by socialists who link the fight for positions and resolutions with the struggle to gain the backing of the shop floor for real class solidarity.

The recent Socialist Worker industrial conference – with 2,800 people present – demonstrated that IS is beginning to make a break through in this direction. But the enthusiasm of the conference has to be translated into the more mundane tasks of fighting on the factory floor if the opportunities in the present situation are to be taken.